I have read recently one of multiple ESMA’s reports, and, I must say, it is pretty interesting to see how entirely subjective some important things are.


Consider REMIT carve-out: ESMA says it should be extinguished, it is bad, it flaws competition and a level-playing field between trading venues, etc.


Regulated markets - according to the ESMA - are the main victims because the electricity and gas products have been redirected to OTFs.


What’s funny, the same regulated markets say what an idea, they are happy with the REMIT carve-out.


Energy market regulators are in opposition too, “energy markets have their specificities”, bla bla bla...


Finally, ESMA “acknowledges an inappropriate wording” of its proposition but “remains generally unconvinced”.


Pretty scientific discussion, seemingly a little bit abstract, and to those disoriented, who ask what’s the point, I owe an explanation that it is about the scope of financial market: regulatory costs of MiFID/MiFIR, breach of EMIR clearing thresholds, MAR, increased costs of hedging, liquidity dry-out and all these awful things that energy traders enumerate in one breath.


And I do not know whether it is good or it is bad that the wholesale energy products traded on an OTF are not financial instruments, but I must admit, the current state of affairs in the respective area is evidently less complicated - at least from the regulatory point of view.


For those who value simplicity there is a good news - it seems that ESMA, at least for the time being, has abandoned its previous conception (to cancel REMIT carve-out).


It means high probability that in the near future things do not change as regards the OTF’s opportunity window.


And one small ask at the end: ESMA, please give final clarity as regards REMIT carve-out OTC equivalent products - it is too important issue to be left unaddressed.




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